Now that you sifted through setting up your business, and getting your financials in some sort of order you can begin the records keeping to ensure your business is its own separate entity from you personally. Even if, and especially if, you’re a SMLLC you’ll want to keep records of any meetings. This can be a standard record of the minutes. You can establish your roles (President, CFO, etc.), confirm your operating agreement, and other things. You need to ensure all these records are kept to make your business legitimate in the eyes of the courts. There is no need to formally record every decision made by the company. A synopsis of your business activities captured every quarter or semi-annually should suffice. You will want to keep these records for as long as you own your LLC. Once the initial forms are created, if you don’t make any significant changes to the structure, these should be easy to replicate every year while you’re out cruising.

There are other records you will need depending on what state you decide to form your LLC. In the state of Florida there is an annual report due every year. This is another form that you can simply replicate once the initial draft is completed. A google calendar reminder every year will help you remember to submit this to the state. Failure to do so could result in your LLC no longer being recognized by the state. Of course for the privilege of doing all these reports and submitting them to the state, you must pay. The fees vary from state to state, but are usually around $100. Some states have no annual filing requirements or fees, so choose wisely.

You must also keep a registered agent in the state you are forming in. If you were going to remain in the state you can designate yourself as the registered agent saving you some money every year. The registered agent will have a physical office and be reachable during normal business hours. The RA is there in case you should get sued or other official paperwork. This helps the government guarantee that they can serve you, should the need arise. The yearly cost for this service is fairly reasonable.

You’ll also want to keep accounting records. This can be accomplished with just a hand written ledger, spreadsheet, software like Quickbooks, or with a bookkeeper. Since our business is not that involved we could have gotten away with a simple spreadsheet, but we opted for utilizing Quickbooks. We can tie Quickbooks to our business checking and savings. Any purchases for the business will be made with the business checking so it will be easy for Quickbooks to log everything. We will just need to make sure everything is appropriately categorized for taxes. Quickbooks will tie in with TurboTax so our taxes should be a little easier, but we’ll see about that in a couple years. Since we have so much going on this year, selling homes, retiring, starting a business, and buying a boat we’ll end up paying someone to help us out for this years taxes. I’m sure it will cost a ton. Hopefully by next year we’ll have systems in place to streamline the process better.

Your taxes will be a little different when you are running your own LLC. If you’re an SMLLC taxes are fairly straightforward. All profits and losses from the LLC are “pass through”. So it’s treated as any other income when you file your taxes. For a MMLLC that is treated as a partnership it is very similar. The profits and losses are treated as pass through based upon the percentage of the company owned. For instance, if you have a 2 member LLC where each member owns 50% each member would take 50% of the profits or losses on their taxes. You can always have your LLC taxed as an S Corp but we chose not to do that so I won’t go into it here.

If you decide to start a business with your boat hopefully this will help a little. There are a lot of free sources to start your research when you’re thinking of starting your company. All Up In Ya Business has videos ranging from Trademarks to LLCs or Corporations. You should still consult your lawyer and tax advisor to find what will work best in your situation.